EU-US Trade Talks on an Agreement on Industrial Goods and Conformity Assessment

In 2018, trade tensions between the EU and the USA escalated. The US imposed tariffs of 25% and 10% on steel and aluminium imports from the EU on national security grounds, against which the EU retaliated. The US also threatened the EU with tariffs on cars and car parts. In parallel, the EU is concerned about US blockage of new appointments to the Appellate Body in the WTO which has paralysed the second appeals step of the WTO dispute settlement system. In July 2018, Commission President Juncker reached a political agreement with President Trump to avoid further escalation on the tariff front. The Joint EU-US Statement adopted upon President Juncker’s visit to the White House stated that the EU and US agreed to work together toward, first, zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods, as well as to reduce barriers and increase trade in services, chemicals, pharmaceuticals, medical products, as well as soybeans. Second, EU and US agreed to strengthen strategic cooperation with respect to energy. Third, the partners agreed to launch a close dialogue on standards in order to ease trade, reduce bureaucratic obstacles, and slash costs. Finally, they voiced a commitment to join forces to protect American and European companies better from unfair global trade practices, to reform the WTO and to address unfair trading practices.

In January 2019, the European Commission published two draft negotiating directives partially implementing the first point of the Joint Statement. The Commission requested the opening of negotiations on a trade agreement, which would strictly focus on the removal of tariffs on industrial goods, and exclude agricultural products; and on an agreement on conformity assessment, that would help address the objective of removing non-tariff barriers Meanwhile in January 2019 the United States Trade Representative (USTR) published negotiating objectives for US-EU trade negotiations. The US objectives are more ambitious than those of the EU are and include the elimination of tariff and non-tariffs barriers on agriculture, which is a particularly sensitive area for the EU. The Council adopted a decision to authorize the opening of negotiations with the USA in April 2019. France voted against the mandates, and Belgium abstained, in a departure from the usual consensual approach for opening trade negotiations. The negotiations never officially began under the Trump Administration, although technical talks on conformity assessment progressed slightly.

To read the full report from the European Parliament, please click here.